For years, Aberdeen Asset Management laboured in India in the shadow of HSBC's star stock-picker Sanjiv Duggal. The rupee crisis has changed that.

A lower-risk investment approach by Aberdeen has trumped Duggal's riskier strategy, which had paid off handsomely for years, in a dramatic change of fortunes for the two largest India funds geared to foreign investors.

The Aberdeen Global-Indian Equity Fund overtook the HSBC's GIF Indian Equity fund last year in the league of assets under management and the gap between the two has been widening.

At $4 billion, the Aberdeen fund is now double the size of the $2 billion HSBC fund, data from industry tracker Lipper, a Thomson Reuters company, shows.

HSBC "has lost huge market share," said Dhruva Raj Chatterji, a senior investment consultant at fund research firm Morningstar. Duggal had been overweight on cyclicals and rate sensitive stocks and underweight on defensive plays such as consumer and healthcare shares, he said.

The shift in their fortunes has happened as investors took fright at India's struggle in the past two years with a growing economic crisis, which culminated this year with a 20 per cent slump in the rupee to a record low of 68.85 on August 28.

Economic growth has slowed down to less half the pace seen in early 2010 and the current account has ballooned to a record deficit.

What makes Aberdeen's performance all the more remarkable is that it has increased its funds under management while India-focused mutual funds and exchange traded funds overall have seen net outflows, Lipper figures show.

Both are long-only funds, which restricts their ability to cope with falling markets. Their different strategies are reflected in their performances this year.

The Aberdeen fund is down 15.6 per cent this year through August, a smaller decline compared to the average 23 per cent drop for offshore equity funds focused on India and the 20.2 per cent slide in the MSCI India index, a benchmark measured in dollar terms.

Duggal's fund dropped 34.5 per cent over the same period, its worst performance compared with its benchmark since the fund launched in 1996, the Lipper data shows.

The fund manager moved to Hong Kong from Singapore in early August to take up a new role at HSBC as head of Asian equities fund management, although he still manages the India fund. HSBC declined several requests for comment.

Still, the HSBC fund has produced stellar returns in bull markets. One of Duggal's picks -